Questions 9 to 14 are based on the following information. Prepare the Marginal and Absorption costing statements prior to attempting the questions The budget for Sandrew Printery is for 30,000 units of notepads to be produced for the period. The standard selling price is $15.00. Actual sales for the period is 28,000 units and the actual production is 30,000 units as budgeted. The standard cost of each unit is as follows: Direct material $4.50 Direct labour $1.50 Fixed overhead $3.00 Standard variable cost per unit 9.00 (9) Assuming the firm uses the absorption costing system, determine the closing inventory value at the end of the period a) $30,000 b) $9,000 c) $12,000 d) $18,000 (10) Assuming the firm uses the absorption costing system; determine the profit for the period a) $162,000 b) $252,000 c) $252,000 d) $168,000 (11) Determine the profit if the firm uses the marginal costing system a) $180,000 b) $150,000 c) $162,000 d) $168,000
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Questions 9 to 14 are based on the following information. Prepare the Marginal and Absorption costing statements prior to attempting the questions
The budget for Sandrew Printery is for 30,000 units of notepads to be produced for the period. The standard selling price is $15.00. Actual sales for the period is 28,000 units and the actual production is 30,000 units as budgeted.
The
Direct material $4.50
Direct labour $1.50
Fixed
Standard variable cost per unit 9.00
(9) Assuming the firm uses the absorption costing system, determine the closing inventory value at the end of the period
a) $30,000
b) $9,000
c) $12,000
d) $18,000
(10) Assuming the firm uses the absorption costing system; determine the profit for the period
a) $162,000
b) $252,000
c) $252,000
d) $168,000
(11) Determine the profit if the firm uses the marginal costing system
a) $180,000
b) $150,000
c) $162,000
d) $168,000
(12) Using the marginal costing system; determine the contribution margin
a) $162,000
b) $252,000
c) $270,000
d) $168,000
(13) Assuming the firm uses the marginal costing system; determine the total sales
for the period
a) $450,000
b) $420,000
c) $252,000
d) $270,000
(14) Assuming the firm uses the marginal costing system, determine the closing inventory at
the end of the period
a) $30,000
b) $9,000
c) $12,000
d) $18,000
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